currency question

[malleefarmer]

Not sure what is happening with your loonie. But our aussie dollar has gone from around 90 to 73 in not to long 15 months.
usa feds raise rates there dollar will soar.
Experts suggesting true value for aussie dollar is 60 to 65 cent range.
As you guys know I was involved in importing fertilizer for 8 years until we were bought out by the company called vitterra.
Still have all my contacts and seems by feb march 16 fert could be as high as 800 to mid 800s one due to artificially stimulating demand and falling currency.

If we could lock in currency now at 73 or two use a option stratergy or three lock in fert now for 16 delivery.

What is the best option stratergy ? Locking in currency by selling aussies against us dollar is easiest but need ahealthy balance sheet and margin calls etc.

Same scenario for chemicals glyphosate could double fun and games going on in china re glypho as we speak and currency has huge effect on chems but chems can be locked in.

Hopefully someone may respond.

And early on it was suggested getting cheap Russian or chinese fert on agriville not sure if anyone did it, we did we got 40 tonne and was crap absolute crap had to go out with a spreader wouldn't run through a aircart and then went hard as a rock lesson learnt.

Will give more info on fert prices as it comes to hand

[malleefarmer]

with fear of sounding obnoxious, you may ask why worry about currency cover on fert?

well our expected useage next year 820 tonne of DAP urea and soa and the 800 dollar quote is dap not urea and soa.

the new farming venture is going ok up and running but proof will be in the pudding come year 2 or 3.

ive gone from small acres to medium.

http://www.collaborativefarmingaustralia.com/#! is the model were are using

[Ache4Acres]

Canadian dollar getting smashed, basis goes up, grain co pockets it, farmer eats it...and then fert and Chem prices skyrocket. Sounds typical

Canadian dollar is in a rough rut right now. Unless war breaks out in Middle East, oil is likely heading lower as this year wraps up. September/October has my sphincter all puckered up. Major deflationary pressure everywhere outside the US. Good luck all.

[Oliver88]

CDN $ is currently .7591 USD
CDN $ is currently 1.0449 AUD

WTI Oil is $45.47

[malleefarmer]

CDN $ is currently .7591 USD if this is .65 by the time you plant gonna be a lot of extra bucks for your fert

maybe sask3 has a opinion or hasn't pondered over it before

[SASKFARMER3]

Yea thinking about what to do for next year. Quit,and sell out . Tired of feeding people who don't pay enough to eat. Cut back to half this year amount.
Tired of the bullshit we call farming.
We can't win this game.

[bucket]

The worse part is that we export fertilizer from belle plaine and it's made from canadian natural gas.

Fuel is the same but it's from even cheaper heavy oil.

I would pretty much say we are ****ed.

[TOM4CWB]

Mallee,

The USD is on a high now... not sure how long they can keep easing it up with stimulus backed by QE hot air. I see the Chinese yaun and Japanese yen are both being depreciated as well.. plus the AU$ CDN$ and Euro.

Where this all leads is a big experiment... we are in essence in a massive currency war... USD must be over priced. Fed is stuck as China/Japan/Mexico/Canada/Australia/Euro have been depreciating...US Fed now in a corner... unlikely the Fed can raise interest rates... as the US economy is puffed up on QE and Obama building bigger federal civil service... no productivity gains.

BE CAREFUL Hedging. We are headed into a unparelleled time of volatility. IF ND/Lib gov gets in Canada... I expect CDN$ at .60 $USD. QE will be the only option ND/Mulcair have to build stimulus projects... and compete with Mexico... I doubt US fed will be able to stop CND$ tumble.

Yet as CDN/US grain prices fall... Fert made in Canada needs to fall as well... and can.

This is a total smoz to say the least... if a guy can use options... it might the best risk money spent... to hedge grain as well.

thanks for discussing... I may well take off short Canola and buy CDN$ Puts to hedge 2015 crop... will have to think this through some more....

[malleefarmer]

im no economist but isn't usa actually growing fractionally and if the raise rates off record low levels there dollar will strenghtn againstmost currencys

seems to world economy is china japan and usa in that order they all have poroblems

ps betcha don't sell out sask3 you have family history plus next generation who love farming

[malleefarmer]

ah farming bit like my previous life as a gigalo never got paid what I thought I was worth bahhaha

tongue in cheek guys don't take me seriously reckon cotton just choked on his beer lol and parsley had a cheeky grin

[SASKFARMER3]

No tongue in cheek the USA Dollar is high and if they increase interest rate their the dollar will climb and our two will fall Mexican Peso here we come.

[cottonpicken]

Lol. Something weird is happening but I cant get my head around it yet.